5 Legal Documents Every Small Business Needs
5/15/2023
Starting a business is exciting, but it also comes with legal responsibilities. Having the right legal documents in place from the beginning can protect your business, clarify relationships with customers and partners, and help you avoid costly disputes down the road.
1. Business Formation Documents
Whether you're forming an LLC, corporation, or partnership, proper formation documents are the foundation of your business's legal structure. These documents define ownership, management responsibilities, and operational procedures.
For LLCs, an Operating Agreement is essential, even in states where it's not legally required. This document outlines ownership percentages, voting rights, profit distributions, and what happens if an owner leaves.
For corporations, Bylaws and Shareholder Agreements serve similar functions, establishing the rules for corporate governance and shareholder relationships.
2. Client/Customer Agreements
Every business needs a solid agreement that governs relationships with clients or customers. Depending on your business type, this might be a:
- Service Agreement
- Sales Contract
- Terms of Service
- Membership Agreement
These documents should clearly outline what you're providing, payment terms, timelines, limitations of liability, and how disputes will be resolved.